American Airlines 2005 Annual Report Download - page 74

Download and view the complete annual report

Please find page 74 of the 2005 American Airlines annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 108

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108

71
10. Retirement Benefits
All employees of the Company may participate in pension plans if they meet the plans’ eligibility requirements.
The defined benefit plans provide benefits for participating employees based on years of service and average
compensation for a specified period of time before retirement. The Company uses a December 31 measurement
date for all of its defined benefit plans. American’s pilots also participate in a defined contribution plan for which
Company contributions are determined as a percentage of participant compensation.
Effective January 1, 2001, American established a defined contribution plan for non-contract employees in which
the Company will match the employees’ before-tax contribution on a dollar-for-dollar basis, up to 5.5 percent of
their pensionable pay. During 2000, American provided a one-time election for current non-contract employees
to remain in the defined benefit plan or discontinue accruing future credited service in the defined benefit plan as
of January 1, 2001 and begin participation in the defined contribution plan. Effective January 1, 2002, all new
non-contract employees of the Company become members of the defined contribution plan.
In addition to pension benefits, other postretirement benefits, including certain health care and life insurance
benefits (which provide secondary coverage to Medicare), are provided to retired employees. The amount of
health care benefits is limited to lifetime maximums as outlined in the plan. Substantially all regular employees of
American and employees of certain other subsidiaries may become eligible for these benefits if they satisfy
eligibility requirements during their working lives.
Certain employee groups make contributions toward funding a portion of their retiree health care benefits during
their working lives. The Company funds benefits as incurred and makes contributions to match employee
prefunding.